An in-house hearing officer Tuesday cleared
Arthur Coia, president of the Laborers union, of associating with
members of organized crime, but fined him $100,000 for buying
a $450,000 Ferrari with help from a supplier to the union. The ruling was immediately attacked by the
Justice Department as flawed and by conservative groups who said
the investigation by union-appointed officials, to which the department
had agreed, was half-hearted because Coia is friendly with President
Clinton.

After a three-year investigation, Peter Vaira,
the hearing officer, who used to be U.S. Attorney in Philadelphia,
found that there was not enough evidence to prove charges that
Coia associated with a New England mob boss and that he appointed
a known mob associate to an important union position. In his 108-page ruling, Vaira ruled against
Coia on only one of 16 charges, finding that he was guilty of
a conflict of interest and of receiving improper financial benefits
when a Rhode Island car-leasing company helped him finance the
purchase of the Ferrari.

Union officials said that the U.S. Attorney
in Boston was investigating the transaction, in which Coia bought
the car while the car-leasing company held the title, letting
Coia avoid more than $40,000 in luxury taxes on the vehicle. This
also enabled Coia to resell the limited edition car three years
later as a new vehicle.

The union's in-house prosecution of Coia
has faced repeated attacks from Republican officials because the
Clinton administration in 1995 dropped a planned civil racketeering
suit against the Laborers, long considered one of the nation's
most corrupt unions, and instead allowed the union to investigate
itself. Republicans have repeatedly maintained that Coia has benefited
from a sweetheart deal because the Laborers union has donated
millions of dollars to the Democratic Party in recent years and
because Coia and the president are so friendly that they have
swapped golf clubs as gifts.

Until Tuesday, Justice Department officials
repeatedly defended the in-house investigation, saying it was
a model because it saved the government money and manpower. But Tuesday, Justice Department officials
issued an unusually strong criticism of Vaira's ruling. In a joint
statement, James K. Robinson, assistant attorney general for the
department's criminal division, and Scott R. Lassar, the U.S.
Attorney in Chicago -- which conducted the original eight-year
civil racketeering investigation -- said they believed "the
opinion contains serious factual and legal errors" for clearing
Coia of mob ties.

The two officials said while they believed
the case "was thoroughly investigated" and "vigorously
prosecuted," they would urge Robert Luskin, the union prosecutor
who brought the charges before Vaira, to appeal.

Coia's lawyer, Howard Gutman, welcomed the
decision. "The evidence demonstrated overwhelmingly that
Arthur Coia has never been controlled by the mob and that the
mob actually despises Arthur," Gutman said. In a statement, Coia said that while the
investigative process "may have been personally painful,
it was necessary to preserve the integrity of our reform."

Kenneth Boehm, director of the National Legal
and Policy Center, a conservative research group, called the ruling
a "slap on the wrist" that shows the Justice Department
was wrong to put its faith in the idea that the union could reform
itself. "The Department needs to admit its mistake,
take over the union and institute real reforms -- especially ousting
Coia," Boehm said.

Coia's union, the Laborers International
Union of North America, claims to have 750,000 members, most of
them construction workers.

The central charges in the case asserted
that Coia violated union rules by associating with mobsters. Specifically,
Luskin asserted that Coia associated with Raymond Patriarca Jr.,
head of New England's powerful Patriarca crime family. Federal prosecutors have long said that Coia's
late father, Arthur E. Coia, who headed the Laborers union in
Rhode Island, was a close associate of Patriarca's late father,
Raymond Patriarca Sr., a legendary New England crime boss.

Coia acknowledged knowing the younger Patriarca,
saying they met when they were planning the defense in a case,
later dismissed, in which, Coia, his father and the elder Patriarca
were charged with racketeering. But Luskin charged that Coia had
repeatedly met with the younger Patriarca after that case was
dismissed, noting that Patriarca had sought to breed his Rottweiler
with dogs from Coia's prize-winning kennel. Vaira noted that the two key witnesses Luskin
used did not provide the definitive evidence that he had indicated
they would. Thomas Hillary, an unofficial stepson of the elder
Patriarca, failed to link Coia meaningfully with Patriarca, Vaira
said, while he found that Nino Cucinotta, the younger Patriarca's
driver who testified that Coia and Patriarca met frequently, was
not a credible witness. As for the Rottweiler breeding, Vaira found
that this did not constitute the type of association prohibited
by union rules.

But Vaira lashed into Coia's buying the Ferrari
with the help of Viking Oldsmobile, which leased cars to the union
and was run by a long-time friend. Even though Vaira said Coia
did not receive a kickback and lost money when he sold the car
for $380,000, Vaira said Coia violated union rules by engaging
in a conflict of interest in buying the car. Coia purchased the car by providing some
cash and trading in two Ferraris as a down payment and using a
$300,000 loan that Viking made available. "He was offered the unique opportunity
to make a large profit and receive favorable terms on the purchase
of the vehicle," Vaira wrote. "The conflict of interest
in this matter occurred at the highest level of the union."